Shares in Humana, which until now has had a good track record in meeting guidance, tumbled nearly 12 percent in after-hours trading.

Citing a bigger-than expected jump in new Medicare Advantage members, which create considerable initial costs that decline over time, Humana cut its earnings per share forecast for 2012 to between $6.90 and $7.10 from a previous estimate of $7.38 to $7.58.

"I think we have an unusual situation with all these numbers, a number of perfect storm things coming together," Chief Executive Michael McCallister said during a conference call with analysts.

Humana said it had almost 1.9 million individual Medicare Advantage members at the end of June, an 18 percent increase from a year earlier.

The number of members who went for wellness visits has doubled this year, and the number who received physical exams rose by more than 20 percent -- increases due to policy initiatives from the U.S. government and Humana itself.

Wedbush Securities analyst Sarah James said no other insurance companies have reported the kinds of surprise Medicare Advantage cost issues cited by Humana, but noted that Humana has the biggest exposure to Medicare in the industry.

Humana typically aims to achieve annual 5 percent growth in earnings before interest and taxes, and expressed confidence it will do so again in 2013, James said.

"They have one of the most credible and well respected management teams in the industry and I don't think this will create a large credibility issue for them," James said, adding the company rarely lowers its profit forecasts.

McCallister said his company's strategy was sound and in the call with analysts defended the company's record in projecting earnings and gauging Medicare Advantage trends.

"We've generally been able to project well," the chief executive said. "This company understands what goes into Medicare. I'd rather be us than anybody else in this space."

The company said the magnitude of costs associated with the swelling membership did not become clearly apparent until July, as Humana assessed expenses incurred from the prior month. Just weeks earlier, the company had reaffirmed its earlier 2012 profit view.

For the second-quarter, Humana reported earnings of $356 million, or $2.16 per share, down from $460 million, or $2.71 per share, a year ago. The current quarter results included an expense of 18 cents per share from a legal settlement and a gain of 15 cents per share from medical claim reserves.

On an adjusted basis, Humana earned $2.19 per share, below the average Wall Street forecast of $2.28 per share according to Thomson Reuters I/B/E/S.

Revenue rose 4 percent to $9.7 billion.

Humana shares fell to $62.39 in extended trading on the New York Exchange from a close of $70.55.

(Additional reporting by Michele Gershberg; Editing by Bernard Orr, Richard Chang and Edwina Gibbs)

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